Compulsory music licenses to get Congressional overhaul courtesy of “Mr. Hollywood”

Rep. Howard Berman is using his committee to push for an overhaul of Section …

Copyright law is packed with strange features, but here's one of the strangest: webcasters, satellite radio, and those music stations transmitted through your cable connection all have to pay performance rights both to the composers who wrote the song and the performers who played it. Terrestrial AM/FM radio stations, though, only pay the composer; the performer is allegedly getting "free promotion" and doesn't see a cent.

Howard Berman, the California Democrat who now heads the Subcommittee on Courts, the Internet and Intellectual Property, wonders if it's time for everyone to pay the same fees. "Is it finally time for a performance right to extend to terrestrial radio?" he said this morning. It was just one of the many questions raised at a committee hearing on reforming Section 115 of the Copyright Act, the part that covers compulsory licenses (the same kind of license that AllofMP3 claims to have under Russian law, and which the RIAA rejects). Reform of this section stalled last year, but Berman is giving it another shot.

Marybeth Peters, the Register of Copyrights, testified before the committee and said that "reform of the digital music licensing system is the most important music issue currently before Congress." Ambiguity about fees is crippling the market, she believes, and points as evidence to ongoing court cases in New York over what is owed to whom.

Broadcasters of all kinds are able to take out a "compulsory license" (that is, it can't be denied by the copyright owners) to play music over the airwaves and the Internet provided that they pay certain statutory fees. But the fees have grown confusing enough that many companies don't even know if they are required to pay them. For instance, are streaming audio services offering a "public performance" of a work? What about download services? Music publishers have one view on these questions, while broadcasters have another. The courts are currently trying to sort it out, but Peters argues that Congress needs to overhaul Section 115 to address the "lack of clarity regarding which licenses are required for the transmission of music."

What will emerge from the committee's efforts is anyone's guess at this point. Although all the parties involved recognize the need to figure out a simpler, clearer model for digital transmission rights, no one can agree on exactly what the model should look like. Music industry representatives met with Peters last year but were unable to reach any unanimous agreements.

Berman believes that the issue is important enough to address once more, even if reaching consensus is difficult. "I fear that if we do not address particular reforms to Section 115 soon, legitimate music services will not be able to compete with 'free' or provide consumers with their choice of music anytime, anyplace, and in any format while at the same time ensuring that creators receive adequate compensation," he said.

While last year's attempt to overhaul Section 115 was criticized as an assault on "fair use" by the EFF and other groups, the issue has little to do with how consumers use or access music. What it might do is affect the prices that people are forced to pay, though; if online music stores and streaming services are required to pay more money in licensing fees, that expense could be passed along to the consumer. On the other hand, should the proposed reform achieve its intended goal of reducing paperwork and complexity, cost savings could be had instead. And, of course, a whole lot of nothing might be the only result, much as it was last year.